Ask Question
10 January, 23:53

A credit sale is made on July 10 for $900, terms 1/15, n/30. On July 12, the purchaser returns $100 of goods for credit. Give the journal entry on July 19 to record the receipt of the balance due within the discount period.

+5
Answers (1)
  1. 11 January, 00:08
    0
    Dr. Cr.

    July 19

    Cash $792

    Discount expense $8

    Account Receivable $800

    Explanation:

    The term 1/15, n/30 mean there is a discount of 1% is available on the sales value, if payment is made within 15 days of sale with credit term of 30 days.

    The sale of $900 was made on July 10 and discount period is until July 25.

    On July 12 goods amounting $100 was returned and now the amount due from the customer is $800 ($900 - $100).

    The payment made on July 19 is actually in the discount period and it is eligible for the discount as it is made before July 25.

    Discount = Amount due x Discount rate

    Discount = $800 x 1% = $8

    $792 Cash received against the sale made on July 10 and discount $8 is expensed. Total of $800 is credited from the account receivable account to eliminate it.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “A credit sale is made on July 10 for $900, terms 1/15, n/30. On July 12, the purchaser returns $100 of goods for credit. Give the journal ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers